Inside Google

Testimony Says Deal Violates Law, Is Anti-Competitive And Raises Privacy Concerns

WASHINGTON, DC — The proposed Google Books settlement should be rejected because it is anticompetitive, violates both U.S. and international law and raises substantial threats to privacy, Consumer Watchdog’s John M. Simpson told the House Judiciary Committee today.

The Committee hearing focused on “Competition and Commerce in Digital Books.”

“Let me be absolutely clear. We do not oppose the concept of digital libraries,” said Simpson. “Done correctly, they would greatly enhance public access to books. Everyone should be in favor of that.”

Simpson said a key problem is the unfair competitive advantage Google receives under the settlement that comes from its attempt to pull an end-run around the appropriate legislative solution to the orphan books problem.  “This is not an issue for a court and certainly one that cannot be settled by solving the problem for one large corporation and no one else,” he said.

“Congress must resolve the ‘orphan rights’ issue,” Simpson said. “It could also step in with legislation about what exactly constitutes fair use in the digital age, though that matter could be fairly adjudicated by the courts.  Privacy guarantees are another area appropriate for legislative action.”

He said the problem is Google’s monopolistic digital library and how it would be implemented. “The proposed class-action settlement is monumentally overbroad and invites the court to overstep its legal jurisdiction, to the detriment of consumers and the public,” he said. “The proposed settlement agreement would strip rights from millions of absent class members, worldwide, in violation of national and international copyright law, for the sole benefit of Google.”

“The parties in the suit negotiated the Google Books settlement in secret and there was no opportunity to represent and protect the broad interests of all consumers,” Simpson told the Committee.  “This deal simply furthers the relatively narrow agenda of Google, The Authors Guild and the Association of American Publishers.”

Read the text of Simpson’s written testimony here: http://www.consumerwatchdog.org/resources/Judiciarytestimony091009.pdf

He told the Judiciary Committee the settlement should be rejected because:

— It is not fair, adequate or reasonable because it far exceeds the actual controversy before the court and abuses the class action process.

— It is an unauthorized attempt to revise the rights and remedies of U.S. Copyright law.

— It conflicts with international law, specifically The Berne Convention for the Protection of Literary and Artistic Works, an international copyright treaty.

–It gives Google an unlawful and anti-competitive monopoly.

— It fails to provide adequate privacy guarantees for users of the service.

The amount of data that Google could amass about a reader’s behavior is unprecedented.  It could be commingled with data from other Google services posing a new threat to user privacy and flies in the face of the U.S. tradition of privacy regarding reading habits, Simpson said.

“Consumer Watchdog supports digitization and digital libraries in a robust competitive market open to all organizations, both for-profit and non-profit, that offer fundamental privacy guarantees to users,” Simpson concluded. “But a single entity cannot be allowed to build a digital library based on a monopolistic advantage when its answer to serious questions from responsible critics boils down to: “Trust us. Our motto is ‘Don’t be evil.’”

In April Consumer Watchdog asked the U.S. Justice Department to intervene in the Google Books settlement and Justice subsequently announced it was investigating the deal. Tuesday the firm of Kasowitz, Benson filed an amicus brief on Consumer Watchdog’s behalf in U.S. District Court opposing the settlement.  The Justice Department has until Sept. 18 to offer its view and Judge Denny Chin has scheduled a hearing on the settlement for Oct. 7.

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Consumer Watchdog, formerly the Foundation for Taxpayer and Consumer Rights, is a nonprofit, nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, Ca.  Our website is www.consumerwatchdog.org.

Kasowitz, Benson, Torres & Friedman LLP is a national law firm with over 300 lawyers specializing in high stakes, complex litigation.  The firm has offices in New York, Newark, Houston, Atlanta, Miami and San Francisco. For more information, visit www.kasowitz.com.
Contact: Daniel Fetterman, 212-506-1934, [email protected] or Peter Toren, 212-506-1986, [email protected].